Patrick Industries Q3 2026 Sales Flat as RV Weakness Offsets Growth

Patrick Industries Inc. (NASDAQ: PATK) reported nearly unchanged third-quarter 2026 revenue as growth in powersports, marine and housing offset a 15% decline in its recreational vehicle business. Profitability improved on an adjusted EBITDA basis, underscoring the impact of the company’s broader end-market mix amid continued pressure on consumer demand for large discretionary purchases.

Net sales were $975 million, compared with $976 million in the third quarter of 2025. Gross margin increased to 23.6% from 22.6%, while adjusted EBITDA rose 3% to $116 million. Adjusted EBITDA margin expanded 40 basis points to 11.9%, and adjusted operating margin held at 6.8%.

Adjusted net income was $34 million, compared with $35 million a year earlier, while adjusted diluted earnings per share increased to $1.03 from $1.01. The per-share results included dilution of about $0.03 from convertible notes and related warrants, down from approximately $0.07 in the prior-year period.

On a GAAP basis, net income fell to $21 million from $35 million, and diluted earnings per share declined to $0.64 from $1.01. The quarter included $15 million of merger-related costs and $2 million of restructuring and related expenses. GAAP operating margin was 5.1%, compared with 6.8% a year earlier.

Powersports and marine offset RV weakness

RV remained Patrick’s largest end market, accounting for 37% of quarterly sales, but revenue declined 15% to $362 million. Industry wholesale shipments fell 13% to 66,900 units, while estimated retail shipments decreased 14% to 88,000. Trailing-12-month content per unit rose 4% to $5,263, partially mitigating the effect of lower volumes.

Marine revenue increased 14% to $171 million, representing 18% of total sales. Wholesale shipments grew 8% to 34,200 units, although estimated retail shipments declined 10% to 39,100. Trailing-12-month content per unit increased 20% to $4,942. Patrick said marine electrical acquisitions have supported its strategy of offering more complete solutions, while premium categories continued to perform better than value-oriented products.

Powersports produced the fastest growth, with revenue up 30% to $128 million, or 13% of quarterly sales. The company cited resilient demand for utility-focused vehicles, broader adoption of its cab enclosures and additional content wins in premium audio systems. Patrick also said its engineering teams continue to work with original equipment manufacturers on current and next-generation platforms.

Housing revenue rose 4% to $314 million and represented 32% of sales. Estimated manufactured housing wholesale shipments increased 2% to 26,100 units, while trailing-12-month manufactured housing content per unit declined 2% to $6,565. Broader housing starts decreased 4% to an annualized 1.34 million. The company said site-built activity remained subdued, though commercial construction supported the industrial portion of the business.

2026 cash flow outlook reduced

Patrick now expects 2026 operating cash flow of $300 million to $330 million, compared with its previous range of $320 million to $350 million. Its free cash flow estimate was reduced to $230 million to $250 million from approximately $250 million. The forecasts include merger-related costs.

The company continues to expect full-year adjusted operating margin to remain flat from 7.0% in 2025. Capital expenditures are projected at $70 million to $80 million, with a tax rate of 24% to 25%.

Patrick narrowed its 2026 RV wholesale shipment outlook to 285,000 to 295,000 units from 285,000 to 300,000. It now expects powersports organic content to increase by a low-double-digit percentage, compared with its previous low-single-digit forecast, and powersports wholesale shipments to rise by a high-single-digit percentage rather than a low-single-digit rate. Other end-market forecasts were unchanged.

For 2027, management’s initial standalone outlook calls for flat RV and marine wholesale and retail shipments. Powersports organic content and wholesale shipments are each expected to increase 3% to 5%, while manufactured housing shipments and new housing starts are projected to range from flat to up by a mid-single-digit percentage. Adjusted operating margin is expected to increase by 30 to 50 basis points.

All forecasts exclude any impact from Patrick’s pending merger with LCI Industries. Following the signing of the merger agreement, Patrick has been restricted from making additional share repurchases. The company paid $15 million in dividends during the third quarter.

Patrick ended the quarter with $716.4 million of available liquidity and net leverage of 2.9 times pro forma adjusted EBITDA. Total debt outstanding was approximately $1.39 billion.

Management said a meaningful improvement in retail demand would likely depend on stronger consumer confidence and lower interest rates. The company also identified economic cyclicality, inflation, tariffs and other trade restrictions, geopolitical tensions, supply-chain exposure and natural disasters among the factors that could cause actual results to differ from its outlook.